LA Times: More employers doing away with pensions ('This is a watershed event,' one expert says.)

[Omaha Steve]

http://www.latimes.com/news/nationworld/washingtondc/la-na-pensions11jul11,1,2073418.story?ctrack=1&cset=true

More employers doing away with pensions, study finds
The swift demise of traditional plans catches some analysts by surprise. 'This is a watershed event,' one expert says.
By Peter G. Gosselin, Times Staff Writer
July 11, 2007

WASHINGTON — Nearly two-thirds of employers that offer traditional pensions have closed their plans to new hires or frozen them for all employees, or plan to do so in the next two years, according to a study released Tuesday.

The latest numbers show an acceleration in the decline of pensions — retirement plans in which employers, instead of employees, are responsible for investing retirement money and providing benefits. They also illustrate that the trend is no longer confined to troubled industries such as steel, auto and airlines, but now involves healthy companies such as IBM and Verizon.



Analysts have known for some time that the number of employers shutting or freezing their pension plans was on the rise. But the sharpness of the increase caught some by surprise.

"This is a watershed event," said Jack VanDerhei, a Temple University pension specialist. "There has been a steady decline in traditional pensions for two decades, but the trend is really accelerating, and it's going to accelerate even more."

The survey by the industry-supported Employee Benefit Research Institute and Mercer Human Resources Consulting shows that most companies that close off their pensions seek to partially offset the loss to employees by increasing contributions to firm-sponsored 401(k)s, where employees are responsible for managing their own retirement money.

But critics say the increases do not make up for the demise of pensions.

FULL story at link.

[electprogdems]

1. well, don't they need that money for

executive pay? :puke: :puke:

[1620rock]

2. And golden parachutes.

[Journeyman]

3. Here's another issue the prescient foresaw thirty years ago. . .

Who couldn't see that what the big three and so many other troubled companies were doing decades ago -- along with the emergence of 401k's and all the other assorted "personal" retirement plans -- that this spelled the end of guaranteed pensions and people "set for life." This realization kept me from involvement with any major corporation (not that I ever wanted such a life), and helped me realize my retirement -- such as it will be -- is entirely dependent on my decisions (and a whole lot of luck).

I hope most of those people had the foresight to make alternate plans.

All the more reasons to fight like hell for Social Security and guaranteed health care.

[aquart]

4. They're gonna be so sorry

When they don't have pension funds to raid to cover their craptastic mistakes.

Another shortsighted Republican policy.

[JDPriestly]

5. We have Nixon to thank for this.

Remember the excerpt from the Nixon tapes in Sicko. Well, not only do we have Nixon to blame for HMOs, we also can blame him for ERISA which governs pensions (and other employee benefits). It is a horrendous piece of legislation that is going to mean misery for millions of unsuspecting elderly Americans in the next 20 years. I figure that the consequences of that trash legislation will cause an even greater outrage than the health insurance for profit mess. Today's kids are worried about the fate of Social Security. Wait until they find out that many of their parents actually have no pension, no savings and nothing for their old age. A lot of kids are going to see a lot of parents move in with them. The good news is that the housing will become very cheap when the elderly are forced to sell their homes just to survive. The generation with pensions is dying out. 401Ks really haven't done all that well in the past 6 years.